Support for ceramic industry

THE country’s ceramic manufacturers and exporters are immensely suffering since the US cancelled GSP facility for Bangladesh in 2013. Until the scraping of the duty-free facility export of ceramic products to the US market earned good income for the industry. But with import duty at 30 percent now as against zero tariffs under GSP facility, export to the US market has become almost unsustainable. But so far no other export sector except RMG has gripped the government’s attention although it never enjoyed GSP for export to the US market. But it managed to receive government cash incentive for higher export. But media report quoting ceramic industry leaders said the growing non-conventional export sector has been left to suffer on its own.

Bangladesh has the scarcity of clay used as raw materials in manufacturing ceramics and importing much of it at high cost. Local ceramic producers are producing quality items for export markets but since its export to the US market suffers the setback, it is quite hard now for them to run the booming sector without government cash support until at least GSP reopens. Now they are mostly relying on the domestic market; which do not generate enough income to recover cost. Moreover, duties on importing raw materials and poor gas supply to factories are adding more troubles to the sector at a time when it is struggling to survive.

Trade figure shows Bangladesh exported ceramic products worth $47.58 million in fiscal 2013-14 but it fell to $43 million in 2014-15 and further down to $37.69 million in 2015-16. Moreover, as the industry leaders claim, falling exchange rate and trouble in gas supply are seriously impacting the sector. They make their case saying the government has a responsibility to extend cash incentive to the industry at this time to allow it to survive external market shock. If the garment sector can get such support why ceramics sector not.
 
Ceramics is a relatively new industry in the country and 40 out of 60 ceramic factories were set up in the last 10 years. They are producing tiles, tableware and sanitary ware, but it is tableware that accounts for 95 percent of Bangladesh’s ceramics export. Industry leaders are highly critical of the government’s discrimination towards them while it is easily giving incentives to RMG, which have its own capacity now to compete.

We believe that industries must survive by their own competitiveness and if and when government incentive is necessary for the greater interest of the economy, it may be provided on selective basis until the situation improves. It can’t be a permanent solution and yet garment sector has made it a continued practice with strong lobbies and several MPs who own many factories. In our view ceramic industry should not be discriminated as well.